An Ultimate Guide To Governance, Risk And Compliance

"Rule number one: always keep the curtain drawn. Rule number two: only open the door if you hear my secret knock. And rule number three: don't ever go out alone, especially not in daylight. That's it, three rules." Remember Jim Hopper quoting these lines to Eleven in “Stranger Things”?

Pretty similar to these rules, Governance, Risk And Compliance also revolves around three simple rules. Rule number one: Governance i.e., always align processes and actions with business goals. Rule number two: Risk i.e., identify and address the organizational risks. Rule number three: Compliance i.e., ensure all activities meet all legal and regulatory compliance. Pretty simple, right?

Each of these disciplines has its priorities and dictates the way of doing things. GRC leaders are now acknowledging the power of sharing data and intelligence to drive better business results and build stronger, more resilient organizations. The significance of GRC has grown increasingly important over the past few years due to new regulations, the expanding digital footprint of enterprises and increasing cyber threats. In a nutshell, GRC provides a structured and integrated approach to managing risks and compliance with company policies. Additionally, it enables accountability for adherence to policies, procedures, standards and best practices across all departments.

Read on to explore the evolution, working, benefits, applications and future of GRC in detail.

What Is Governance, Risk And Compliance?

Jim Hopper, the Chief of Police from Stranger Things, is undoubtedly one of the most incredible characters of all time. Whether it is about helping Joyce find Will or assisting Eleven destroy The Mind Flayer, Hopper has always been there to help his dear ones to accomplish their missions and meet uncertainties. Likewise, Governance, Risk And Compliance AKA GRC is a set of processes and procedures that assist organizations in achieving business objectives, meeting uncertainties and acting with integrity.

The primary motto of GRC is to impart upright business practices into routine work. GRC has become even more crucial as risks have become more complex and damaging. These days, GRC extends multiple disciplines, namely enterprise risk management, compliance, third-party risk management, internal auditing and more.

Now, it's time to turn the timeline upside down and sneak a peek into the mysterious history of GRC.

History Of Governance, Risk And Compliance (GRC)

“Nothing's gonna go back to the way that it was. Not really. But it'll get better, in time.” – Jim Hopper.

The history of Governance, Risk And Compliance is no exception to this quote, as GRC got better with time. Let’s find out how!

The exact origins of Governance, Risk And Compliance remain a strange mystery but we can say that GRC was a reaction to the need for better internal control and governance. During the early 2000s, the Sarbanes-Oxley Act of 2002 handled the compliance issue. The Enron and WorldCom scandals shook the world during the same period. Given the impact of these scandals, firms had to consider risk a priority. Finally, in 2002, Michael Rasmussen, the Father of Governance, Risk And Compliance, coined the acronym and concept of 'GRC' when he was an analyst for Forrester. That's how the idea of Governance, Risk And Compliance came into existence.

With time, GRC evolved as a ray of hope for enterprises that wanted to meet compliance, manage risks and provide internal governance. Soon it became a crucial part of the infrastructure of the organizations. Pretty cool history there, right? It's time to get back to the present and find out how does GRC work?

Working Of Governance, Risk And Compliance

In this strange world of vulnerabilities, there's a new code red (risk) waiting for the organizations at every step. However, they don't have to fret anymore as GRC (read Jim Hopper) is always there to protect them and here's how!

 

• The process of Governance, Risk And Compliance kick-starts with identifying risks. The key is to break down the uncertainties into little portions and ensure that organizations can identify, analyze and control risks that might disrupt the achievement of strategic goals. It eventually assists organizations in meeting the risks independently and dealing with them accordingly. Under this step, a standard risk assessment or response framework is developed. Further action plans are implemented to meet those risks.

• As the next step, GRC activities are integrated with multiple business areas. It's an umbrella activity that ensures that suitable risk management tools and procedures are followed to monitor, manage and report risks. Later, alternatives such as strategic planning, capital allocation and tactical decision-making are utilized to measure future risks. Further, management and the board are given a performance evaluation of present conditions and risks.

• Then comes the most crucial part – compliance. It refers to confirming that the organization takes measures and enacts control to meet compliance needs. GRC equips them with a standard or set of guidelines and ensures there's no compromise in following the regulatory practices.

So, that was all about the working of GRC. Here comes one of the exciting parts; the benefits of GRC!

Benefits Of Governance, Risk And Compliance

Hopper is a complex, fascinating and well-developed character. He has the substance that goes beyond his role as the town sheriff. Depending on which moment you are watching, he can be stern and intimidating or soft-spoken and sympathetic. Hopper is probably best described as an enigma. Whether an expert combatant or a truly caring friend, Jim Hopper has been there to support, motivate and protect his dear ones. That's how Jim Hopper – the hero of Hawkins - helped everyone. Yet, how exactly does GRC benefit the organization? Let's find out:
 

• Out-and-out Business Transparency

  Governance, Risk And Compliance strategies benefit businesses by building a more productive and efficient environment where all components of the organization work toward achieving a common goal. Besides, it helps organizations in detecting and prevent common risks. When GRC data is combined successfully, instant decision-making becomes an easy task for the management.

• Spotless Reputation

  There are many ways Governance, Risk And Compliance help businesses manage their risks more effectively and safeguard their reputation. Besides, information pooled from GRC allows organizations to manage crises professionally and effectively while protecting the organization and its board members.

• Cost Reduction

  Cost reduction is one of the prominent benefits of GRC. It helps eradicate redundant and disparate processes, resources and tools that might lead to a waste of time, effort and money. GRC also helps businesses to address cyber security risks in a better way.

Now that you are done with knowing the benefits; let's look at some of the key areas of GRC.

Application Of Governance, Risk And Compliance

Jim is shown as an incredibly empathetic and caring person. For instance, the way he empathizes with Eleven and adopts her is something that makes him a great companion to her. He also assures Joyce that he has her back and that no matter what he's always there to meet the worst nightmares of her life head-on!

Like Hopper, GRC always has your back! Let’s read on and figure out a thing or two about the applications of GRC:
 

• It helps you determine and mitigate risks tied to the use, ownership, operation, involvement and adoption of various practices in the company.

• Content and document management is an area under GRC that assists your enterprise with creating, tracking and storing digitized content.

• GRC helps you with risk data management and analytics that help you with measuring, quantifying and predicting risk and determining measures to reduce the risks.

• GRC also steps in with seamless workflow management that enables organizations to establish, execute and monitor GRC-related processes.

• Audit management is another area of GRC that equips you with organizing information and simplifying processes for conducting internal audits.

• Governance, Risk And Compliance is necessary for organizations operating in a highly regulated environment. In general, GRC increases visibility into the risks an organization faces, creates standard operating procedures and policies, monitors employee actions and more. Applying GRC to your business improves its efficiency by reducing risks and costs related to legal compliance and auditing.

That was all about how GRC is helping organizations in the present. Now brace yourself as we are about to step into the future of GRC!

Future Of Governance, Risk And Compliance

If you are a true fan of Stranger Things, you might have cried rivers on seeing Jim's emotional letter to Eleven (in the last episode of Season 3). The core of that letter was that we should keep growing and moving because that means we are out of the cave. GRC is no exception when it is about growing and moving on - here's how!

It's no secret that having a handful of professionals handling the organization's GRC strategies is no longer enough. The future will need them to have pervasive top-down and down-up IT GRC strategies to ensure that the individuals and teams across all departments are on the same page. Besides, automated GRC in form of GRC software will help empower workflows, eliminate errors and impart efficient decision-making.

The success of the federated approach for GRC will demand the right data modeling and data integration across the processes. It will demand enterprises equip themselves for greater visibility of risk and compliance. What’s more exciting is that GRC will strengthen cybersecurity measures by opening gates for detecting, preventing and combating cyber threats. This will be achieved by managing cybersecurity risks and accessing all vulnerabilities information through a single source of truth i.e., an automated GRC software!

To Sum It Up!

The world is changing and how businesses operate and meet regulatory requirements is also transforming. Companies need to be more agile, dynamic and streamlined to thrive in this new landscape. Implementing GRC is one of the best ways to achieve this goal. GRC offers a range of benefits, including improved visibility of risks, reduced operational costs and the prevention of regulatory non-compliance.

So next time you are part of any board room meeting, don't forget to quirk up the discussion with all the information on GRC you’ve learned from this article.